August 2012 Canadian Economic Fundamentals
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Six factors affecting economic growth in Canada
The Canadian economy is anticipated to grow by only two per cent this year, rather than four per cent.
Alex Carrick, chief economist of Reed Construction Data ` CanaData, explains why.
Carrick explains how inflation, the merchandise trade balance, commodity prices, foreign exchange rates, foreign inflow of capital and government spending influence economic growth, housing prices, consumer spending and interest rates.
Read the full article here.
The Canadian economy is anticipated to grow by only two per cent this year, rather than four per cent.
Alex Carrick, chief economist of Reed Construction Data ` CanaData, explains why.
Carrick explains how inflation, the merchandise trade balance, commodity prices, foreign exchange rates, foreign inflow of capital and government spending influence economic growth, housing prices, consumer spending and interest rates.
Read the full article here.
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Canada mortgage rates hit record low
Canada`s fiscal policymakers are working to cool off the country`s overheated real estate market, tightening lending restrictions and warning buyers about the dangers of excessive debt.
But maybe someone should tell the country`s independent mortgage lenders. They`re working overtime against the government`s policies, engaging in a mortgage rate war that on the one hand could make homeownership more affordable for many Canadians, but but on the other hand scuttles efforts to cool down the housing market before it overheats to the point of collapse.
Read the full article here.
Canada`s fiscal policymakers are working to cool off the country`s overheated real estate market, tightening lending restrictions and warning buyers about the dangers of excessive debt.
But maybe someone should tell the country`s independent mortgage lenders. They`re working overtime against the government`s policies, engaging in a mortgage rate war that on the one hand could make homeownership more affordable for many Canadians, but but on the other hand scuttles efforts to cool down the housing market before it overheats to the point of collapse.
Read the full article here.
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Economy slowing, interest rates to stay lower for longer, say Scotiabank analysts
OTTAWA - Canadians are in for at least two more years of slowing economic activity and low job creation, a condition that should keep interest rates low until 2014, says the Bank of Nova Scotia.
In a new forecast, Scotiabank economists Derek Holt and Dov Zigler estimate the economy will likely average 1.9 per cent growth this year, and 1.8 in 2013.
The forecast is slightly below consensus, and well south of the Bank of Canada's recently revised projections of 2.1 and 2.3 per cent growth in 2012 and 2013.
Read the full article here.
OTTAWA - Canadians are in for at least two more years of slowing economic activity and low job creation, a condition that should keep interest rates low until 2014, says the Bank of Nova Scotia.
In a new forecast, Scotiabank economists Derek Holt and Dov Zigler estimate the economy will likely average 1.9 per cent growth this year, and 1.8 in 2013.
The forecast is slightly below consensus, and well south of the Bank of Canada's recently revised projections of 2.1 and 2.3 per cent growth in 2012 and 2013.
Read the full article here.
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Canada job market set to dive, Conference Board Report predicts
OTTAWA -- The Conference Board says its research suggests Canada's labour market has run out of gas, and could even register a loss of jobs for the month of July.
The Ottawa-based think-tank's help-wanted index fell 4.5 points to 120.5 in June, a reading suggesting only modest job gains in the near term.
It predicts July's employment report from Statistics Canada, which will be released next Friday, will show a loss of 5,500 jobs, marking the first setback since February.
Read the full article here.
OTTAWA -- The Conference Board says its research suggests Canada's labour market has run out of gas, and could even register a loss of jobs for the month of July.
The Ottawa-based think-tank's help-wanted index fell 4.5 points to 120.5 in June, a reading suggesting only modest job gains in the near term.
It predicts July's employment report from Statistics Canada, which will be released next Friday, will show a loss of 5,500 jobs, marking the first setback since February.
Read the full article here.
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Flat confidence good for investors?
The CFIB Business Barometer, which uses a scale of 0 to 100 to measure how companies feel about their expected performance, recorded its fourth straight month of decline. In boom times an index level reads between 65 and 70, but as the optimism of small business owners continues to fall, the index is currently at its lowest level in three years at just 58.6.
Jacques Marcil, Senior Economist at TD Economics confirms that Canada`s prospects ` at least for the short term ` are limited.
`In addition to the continuing difficulties in Europe and the sluggish recovery in the U.S., elevated household debt levels in Canada will keep personal spending growth in check in the near to medium term`, he said.
Compared to the GDP, the index indicates that Canada`s economy could be grinding to a halt. But in addition to the soaring rate of household debt and current unemployment rate, small business owners now fear Flaherty`s new mortgage rules will cripple spending even further.
Read the full article here.
The CFIB Business Barometer, which uses a scale of 0 to 100 to measure how companies feel about their expected performance, recorded its fourth straight month of decline. In boom times an index level reads between 65 and 70, but as the optimism of small business owners continues to fall, the index is currently at its lowest level in three years at just 58.6.
Jacques Marcil, Senior Economist at TD Economics confirms that Canada`s prospects ` at least for the short term ` are limited.
`In addition to the continuing difficulties in Europe and the sluggish recovery in the U.S., elevated household debt levels in Canada will keep personal spending growth in check in the near to medium term`, he said.
Compared to the GDP, the index indicates that Canada`s economy could be grinding to a halt. But in addition to the soaring rate of household debt and current unemployment rate, small business owners now fear Flaherty`s new mortgage rules will cripple spending even further.
Read the full article here.
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Canada's economic growth slows
OTTAWA ` Canada`s economy slowed to a crawl in May, surprising analysts who had expected growth to continue after a relatively strong performance the previous month.
With the U.S. economy also dragging and the European crisis mounting, the focus is now on the Federal Reserve and what options it will offer ` if any ` when its two-day monetary policy meeting ends Wednesday.
Read the full article here.
OTTAWA ` Canada`s economy slowed to a crawl in May, surprising analysts who had expected growth to continue after a relatively strong performance the previous month.
With the U.S. economy also dragging and the European crisis mounting, the focus is now on the Federal Reserve and what options it will offer ` if any ` when its two-day monetary policy meeting ends Wednesday.
Read the full article here.
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Pipelines remain economy's lifeline
According to Natural Resources Canada, the country's crude oil and natural gas pipeline network is over 700,000 kms in length and extends to all provinces and territories except P.E.I. and Nunavut.
The safety record of this huge and vital national energy distribution system for the past few decades is impressive, but the reality is not every drop gets to its intended destination. Accidents are going to happen.
Recently Enbridge, Canada's largest operator of pipeline systems, has been accused of carelessness in its handling of a number of spills that have occurred in both Canada and the United States.
Read the full article here.
According to Natural Resources Canada, the country's crude oil and natural gas pipeline network is over 700,000 kms in length and extends to all provinces and territories except P.E.I. and Nunavut.
The safety record of this huge and vital national energy distribution system for the past few decades is impressive, but the reality is not every drop gets to its intended destination. Accidents are going to happen.
Recently Enbridge, Canada's largest operator of pipeline systems, has been accused of carelessness in its handling of a number of spills that have occurred in both Canada and the United States.
Read the full article here.
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Two more years of slow growth
OTTAWA -- Canadians are in for at least two more years of slowing economic activity and low job creation, a condition that should keep interest rates low until 2014, says the Bank of Nova Scotia.
In a new forecast, Scotiabank economists Derek Holt and Dov Zigler estimate the economy will likely average 1.9 per cent growth this year and 1.8 in 2013. The forecast is slightly below consensus, and well south of the Bank of Canada's recently revised projections of 2.1 and 2.3 per cent growth in 2012 and 2013.
Read the full article here.
OTTAWA -- Canadians are in for at least two more years of slowing economic activity and low job creation, a condition that should keep interest rates low until 2014, says the Bank of Nova Scotia.
In a new forecast, Scotiabank economists Derek Holt and Dov Zigler estimate the economy will likely average 1.9 per cent growth this year and 1.8 in 2013. The forecast is slightly below consensus, and well south of the Bank of Canada's recently revised projections of 2.1 and 2.3 per cent growth in 2012 and 2013.
Read the full article here.
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Who's sitting on all the cash? Corporate Canada
We`ve all heard about Corporate America`s still-growing mountain of cash. But in relative terms, Corporate Canada is sitting on Mount Everest.
Indeed, Canada`s corporate stash is so big that if even a small fraction of it were deployed, it could significantly enrich investors and jump-start the country`s economy all at the same time, argues Capital Economics.
Read the full article here.
We`ve all heard about Corporate America`s still-growing mountain of cash. But in relative terms, Corporate Canada is sitting on Mount Everest.
Indeed, Canada`s corporate stash is so big that if even a small fraction of it were deployed, it could significantly enrich investors and jump-start the country`s economy all at the same time, argues Capital Economics.
Read the full article here.
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Northern Gateway pipeline could go north
Should B.C. Premier Christy Clark follow through her promise to block the proposed Northern Gateway pipeline if her conditions for the project aren't met, Northwest Territories Premier Bob McLeod says he would be prepared to step in and support a "northern route" that would see bitumen shipped from Alberta north to the N.W.T. and out to Asia.
That's because the Mackenzie Valley pipeline, a $16.2-billion project intended to transport natural gas from the Beaufort Sea through the Northwest Territories, south to a hub in northwestern Alberta and out to North American markets, has been put on hold after its investors suspended the funding.
Read the full article here.
Should B.C. Premier Christy Clark follow through her promise to block the proposed Northern Gateway pipeline if her conditions for the project aren't met, Northwest Territories Premier Bob McLeod says he would be prepared to step in and support a "northern route" that would see bitumen shipped from Alberta north to the N.W.T. and out to Asia.
That's because the Mackenzie Valley pipeline, a $16.2-billion project intended to transport natural gas from the Beaufort Sea through the Northwest Territories, south to a hub in northwestern Alberta and out to North American markets, has been put on hold after its investors suspended the funding.
Read the full article here.
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U.S. stands between Canadian oil and Asian market
When it comes to sports we know that Canada`s national obsession is hockey. For those who discuss Canadian politics, however, there is no bigger subject today than oil pipelines.
Whether it was Natural Resources Minister Joe Oliver`s remarks about `radical` environmental groups, NDP leader Thomas Mulcair`s `Dutch disease` analogy, the federal opposition parties` furore over provisions in Bill C-38, or the recent war of words between the British Columbia and Alberta premiers, all relate back to the struggle to export Canada`s oil resource to international markets.
What few of us realize, however, is how much of our nation`s biggest spat has been influenced from outside our borders.
Read the full article here.
When it comes to sports we know that Canada`s national obsession is hockey. For those who discuss Canadian politics, however, there is no bigger subject today than oil pipelines.
Whether it was Natural Resources Minister Joe Oliver`s remarks about `radical` environmental groups, NDP leader Thomas Mulcair`s `Dutch disease` analogy, the federal opposition parties` furore over provisions in Bill C-38, or the recent war of words between the British Columbia and Alberta premiers, all relate back to the struggle to export Canada`s oil resource to international markets.
What few of us realize, however, is how much of our nation`s biggest spat has been influenced from outside our borders.
Read the full article here.
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Property line nightmare may cost homeowners $25,000
Ever wanted to build your own dream home complete with spiral staircase, an open concept kitchen and spacious living area, all to your specifications? Haven`t we all. Steven Boyd and Karen Bursey of Conception Bay, Newfoundland were in the process of doing just that when a stop-work order was issued on their home. The problem? Their house was being built too close to their neighbour`s property. It wasn`t as if the homes were rubbing eaves troughs though. They were too close by a mere 9 centimetres! they`re still off by 9 centimetres ` or the length of a poker-sized playing card, says CBC news.
An inspector picked up on the problem while walking the site. Unfortunately, it was discovered after the foundation was already laid. As a result, Conception Bay South town council has issued a stop-work order. The only way work can continue is if the problem is rectified in one of two ways. The couple can choose to either tear down the wall ` a move that could cost them an additional $25,000 ` or pay their neighbours for the 9 cm of land. Incidentally, their neighbours want $25,000 for the 9 cm of space.
Read the full article here.
Ever wanted to build your own dream home complete with spiral staircase, an open concept kitchen and spacious living area, all to your specifications? Haven`t we all. Steven Boyd and Karen Bursey of Conception Bay, Newfoundland were in the process of doing just that when a stop-work order was issued on their home. The problem? Their house was being built too close to their neighbour`s property. It wasn`t as if the homes were rubbing eaves troughs though. They were too close by a mere 9 centimetres! they`re still off by 9 centimetres ` or the length of a poker-sized playing card, says CBC news.
An inspector picked up on the problem while walking the site. Unfortunately, it was discovered after the foundation was already laid. As a result, Conception Bay South town council has issued a stop-work order. The only way work can continue is if the problem is rectified in one of two ways. The couple can choose to either tear down the wall ` a move that could cost them an additional $25,000 ` or pay their neighbours for the 9 cm of land. Incidentally, their neighbours want $25,000 for the 9 cm of space.
Read the full article here.
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Selling a condo? Beware the taxman
When you sell a property that isn`t your principal residence and make a profit, half of the amount is taxable. This is the so-called capital gains tax and it`s pretty straight forward, but every situation is different. It all depends on how the Canada Revenue Agency views the transaction.
Real estate agent Romano Giusti bought a condo on Richards St. in Vancouver in November 2006 and re-sold it in June 2007 for a profit of $30,831. When he filed his tax return, he paid no tax on the profit, saying it was his personal residence
Read the full article here.
When you sell a property that isn`t your principal residence and make a profit, half of the amount is taxable. This is the so-called capital gains tax and it`s pretty straight forward, but every situation is different. It all depends on how the Canada Revenue Agency views the transaction.
Real estate agent Romano Giusti bought a condo on Richards St. in Vancouver in November 2006 and re-sold it in June 2007 for a profit of $30,831. When he filed his tax return, he paid no tax on the profit, saying it was his personal residence
Read the full article here.
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How to keep a cottage in the family
Dear Jeanne & Leonard:
My siblings, first cousins and I together own two cabins on a beautiful lake. This retreat has been in our family for many years, and the eight of us recently took it over from our parents. Some of us want to make sure the property stays in the family forever (we have 27 children between us). But others think we should establish a way for any owner who might want out to easily sell his or her share to the highest bidder. What's the best way to handle this and other disagreements? - Janet
Dear Janet:
Start by agreeing on a process for making decisions. Majority rule? Electing one person or a three-person board to make decisions? Designating an outside arbitrator? Drawing straws or flipping coins? Any approach will do, as long as you all agree to abide by it.
Read the full article here.
Dear Jeanne & Leonard:
My siblings, first cousins and I together own two cabins on a beautiful lake. This retreat has been in our family for many years, and the eight of us recently took it over from our parents. Some of us want to make sure the property stays in the family forever (we have 27 children between us). But others think we should establish a way for any owner who might want out to easily sell his or her share to the highest bidder. What's the best way to handle this and other disagreements? - Janet
Dear Janet:
Start by agreeing on a process for making decisions. Majority rule? Electing one person or a three-person board to make decisions? Designating an outside arbitrator? Drawing straws or flipping coins? Any approach will do, as long as you all agree to abide by it.
Read the full article here.
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Canada's hot housing markets beginning to cool
TORONTO, Aug. 8, 2012 /CNW/ - The downside risks to Canada's housing market are increasing, according to a Special Report on Canadian Housing released today by Scotiabank.
"Canada's housing market is expected to avoid the sharp downturn witnessed in the United States and Europe," said Adrienne Warren, Senior Economist at Scotiabank. "However, the downside risks to domestic housing activity are increasing. The full impact of the slowdown may not become fully visible until mid-decade."
According to the report, record prices combined with incremental regulatory tightening are reducing affordability and the housing market's earlier momentum, notwithstanding the lowest borrowing costs on record. Pent-up demand has been effectively exhausted after a decade-long housing boom, with Canadian home ownership at record levels. The global outlook also has become much more challenging.
Read the full article here.
TORONTO, Aug. 8, 2012 /CNW/ - The downside risks to Canada's housing market are increasing, according to a Special Report on Canadian Housing released today by Scotiabank.
"Canada's housing market is expected to avoid the sharp downturn witnessed in the United States and Europe," said Adrienne Warren, Senior Economist at Scotiabank. "However, the downside risks to domestic housing activity are increasing. The full impact of the slowdown may not become fully visible until mid-decade."
According to the report, record prices combined with incremental regulatory tightening are reducing affordability and the housing market's earlier momentum, notwithstanding the lowest borrowing costs on record. Pent-up demand has been effectively exhausted after a decade-long housing boom, with Canadian home ownership at record levels. The global outlook also has become much more challenging.
Read the full article here.
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Don't fear the small mortgage lender
Mortgage lenders come in all sizes, ranging from RBC ` the biggest in the country ` to tiny wholesale lenders and credit unions.
When it comes to entrusting a company with your biggest debt, odds are, name recognition matters to you. Consciously or subconsciously, people gravitate to well-known lenders partly because there`s a feeling of safety in `big.`
Read the full article here.
Mortgage lenders come in all sizes, ranging from RBC ` the biggest in the country ` to tiny wholesale lenders and credit unions.
When it comes to entrusting a company with your biggest debt, odds are, name recognition matters to you. Consciously or subconsciously, people gravitate to well-known lenders partly because there`s a feeling of safety in `big.`
Read the full article here.
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Five reasons why falling house prices aren't so bad
Before we start getting all torqued about a falling housing market, let`s remember a few things.
Early indications in June of a slowing market in some cities do not necessarily presage a U.S.-style plunge in housing prices. Forecasters have talked about declines of 10 to 15 per cent being possible, or just a period of drifting sideways. Without a surge in unemployment, it`s hard to see a real crash.
Read the full article here.
Before we start getting all torqued about a falling housing market, let`s remember a few things.
Early indications in June of a slowing market in some cities do not necessarily presage a U.S.-style plunge in housing prices. Forecasters have talked about declines of 10 to 15 per cent being possible, or just a period of drifting sideways. Without a surge in unemployment, it`s hard to see a real crash.
Read the full article here.
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The other Canadian real estate boom
There is another boom in Canadian real estate and it`s not in houses or condos; it`s in professional sports facilities. Several football stadiums and hockey arenas are set to sprout up across the country, and like the residential housing boom, they are largely being built on borrowed money.
The city of Regina unanimously approved a deal for a 33,000-seat stadium for the Saskatchewan Roughriders on July 23. The estimated $278-million cost has the team paying $25 million, while the bulk is split between the city and province (to be repaid in property taxes and higher fees attached to ticket prices). Other new CFL stadiums, meanwhile, are in the works for Ottawa, Hamilton and Winnipeg, and all will be funded by provincial and city governments.
Read the full article here.
There is another boom in Canadian real estate and it`s not in houses or condos; it`s in professional sports facilities. Several football stadiums and hockey arenas are set to sprout up across the country, and like the residential housing boom, they are largely being built on borrowed money.
The city of Regina unanimously approved a deal for a 33,000-seat stadium for the Saskatchewan Roughriders on July 23. The estimated $278-million cost has the team paying $25 million, while the bulk is split between the city and province (to be repaid in property taxes and higher fees attached to ticket prices). Other new CFL stadiums, meanwhile, are in the works for Ottawa, Hamilton and Winnipeg, and all will be funded by provincial and city governments.
Read the full article here.
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Canada's hot housin market shows more signs of cooling
TORONTO ` Canada`s hot housing market showed signs of cooling on Thursday as July housing starts slowed more sharply than expected, but housing prices were still climbing in June and analysts said a real slowdown may not come until late in 2012.
Groundbreaking on new homes fell to a seasonally adjusted annual rate of 208,500 units in July, according to the Canadian Mortgage and Housing Corp, a sharp slowdown from the 222,100 units in June and below the forecasts of analysts in a Reuters poll, who had expected 213,300 starts.
Read the full article here.
TORONTO ` Canada`s hot housing market showed signs of cooling on Thursday as July housing starts slowed more sharply than expected, but housing prices were still climbing in June and analysts said a real slowdown may not come until late in 2012.
Groundbreaking on new homes fell to a seasonally adjusted annual rate of 208,500 units in July, according to the Canadian Mortgage and Housing Corp, a sharp slowdown from the 222,100 units in June and below the forecasts of analysts in a Reuters poll, who had expected 213,300 starts.
Read the full article here.